The biggest US bank, JPMorgan Chase, reported a 28% drop in its second-quarter profits on Thursday, as recession fears increase.
The bank announced quarterly earnings of $2.76 per share, a shortfall of $0.13 from analysts' expectations. This shows that JPMorgan is worried about the economy's future, since the Wall Street Journal stated that the bank has set aside $428 million to cover bad loans and freeze stock buybacks.
Cash set aside for bad loans was mostly responsible for the bank's revenue drop of 1 percent and profit drop of 45 percent reported by The Wall Street Journal. According to the company's results report, sales at the corporate and investment bank dropped 10% while profit fell 26%.
Wall Street trading fees rose by 15%, while investment banking fees fell by 54% due to a slowdown in corporate dealmaking and stock sales, according to the WSJ.
Loans, on the other hand, grew by 6% and became more profitable.
By 0.5 percent in May, and then 0.75 percent in June, the Federal Reserve raised interest rates. According to CNBC, there could be another increase this month.
According to CNBC, the banking sector is keeping a close eye on JPMorgan's quarterly results to see how the bank will fair in the face of mounting concerns that the United States is headed for recession. In Thursday's trade, JPMorgan's stock price fell by over 5%, according to CNBC.
The Daily Caller News Foundation reached out to JPMorgan for comment, but the bank did not answer right away.
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